A dispute that has threatened to spill over into class warfare was triggered last month when the ruling Justice and Development party (AKP) announced the closure of 12 factories belonging to Tekel, the former state tobacco and alcohol monopoly.

Tekel tobacco workers have been protesting in Ankara since December 15, 2009 demanding that the government find them positions in other public institutions, in the wake of the privatization of the monopoly. Workers reacted with outrage after learning they would be redeployed in temporary public sector jobs on reduced pay and conditions. They said the changes would cut their monthly wage from £550 to about £311 and leave them without any severance pay.

A meeting between Prime Minister Recep Tayyip Erdoğan and Confederation of Turkish Labor Unions (Türk-İş) President Mustafa Kumlu, held on the 45th day of protests by workers dismissed from Tekel, increased hopes that the parties would finally find a solution to the current impasse.

The protest scenes prompted condemnation from the prime minister, Recep Tayyip Erdogan, who accused the protesters of being influenced by opposition parties and extremist groups. He said the government would not "dole out money to workers for not producing anything" and challenged them to start their own businesses.Now Erdogan has been forced into an uncharacteristic climbdown after Turkey's main trade union organisation, Turk-Is, said it would call a general strike next Wednesday unless the workers' demands for jobs with equal pay and conditions were met.At a meeting with Turk-Is leaders and Tekel workers' representatives on Thursday, the prime minister ordered the finance minister, Mehmet Simsek. and the labour minister, Hayati Yazici, to find a formula to resolve the dispute by Monday, February 1st. That was enough to persuade Tekel workers to postpone a hunger strike planned to start today.

Workers have occupied the ­Turk-Is headquarters and braved freezing temperatures to sleep in tents outside the AKP headquarters. Compelling media images of the protests have provoked angry rows in parliament. Analysts believe the situation has inflicted political damage on a government heavily reliant on conservative working-class support.

The prospect of a victory for the Tekel workers follows the violent suppression of strikes by firefighters and railway workers. Industrial disputes in Turkey are subject to restrictive laws introduced after a military coup in 1980.

Buses carrying an estimated 12,000 employees descended on the capital, Ankara, from factories all over the country. Angry workers were confronted by police firing teargas and pepper spray when they staged a demonstration outside the AKP's headquarters.